-Medicare deduction on Sch SE

[MargaretMort]

I finally was able to download the last 1099 for my personal tax return--I never do anyone else's return until I have re-awakened that part of my brain making mistakes on my own. If I am going to take the Medicare Part B premiums as a deduction against my SE tax, I still don't know where I am supposed to show it. If you add it to Line 29, it carries to the SE but it also deducts from the total income which it isn't supposed to do as I understand it. I checked Pub 535 but it is, and will continue to be until sometime in March, the 2009 version which, of course, says you may not use those premiums. It isn't going to make a lot of difference in my personal taxes and, as I have said before, I don't think I have another client who would have this situation. BUT..it bugs the heck out of me when we are told one thing and then are left hanging to try to figure out how to take advantage of what we have been told. And I admit I am getting to be crotchety! On that happy note I will say thank you once again. MM

[cred65]

Line 29. See attached

Line 290001.pdf

[Gail]

I finally was able to download the last 1099 for my personal tax return--I never do anyone else's return until I have re-awakened that part of my brain making mistakes on my own. If I am going to take the Medicare Part B premiums as a deduction against my SE tax, I still don't know where I am supposed to show it. If you add it to Line 29, it carries to the SE but it also deducts from the total income which it isn't supposed to do as I understand it. I checked Pub 535 but it is, and will continue to be until sometime in March, the 2009 version which, of course, says you may not use those premiums. It isn't going to make a lot of difference in my personal taxes and, as I have said before, I don't think I have another client who would have this situation. BUT..it bugs the heck out of me when we are told one thing and then are left hanging to try to figure out how to take advantage of what we have been told. And I admit I am getting to be crotchety! On that happy note I will say thank you once again. MM

You need to put the amount on line 10c of "Line 1(Sch A(1040))-Medical and Dental Expenses"

[Jack from Ohio]

Line 29. See attached

The Pub is inacurate due to being printed before the laws were passed.

[Jack from Ohio]

I finally was able to download the last 1099 for my personal tax return--I never do anyone else's return until I have re-awakened that part of my brain making mistakes on my own. If I am going to take the Medicare Part B premiums as a deduction against my SE tax, I still don't know where I am supposed to show it. If you add it to Line 29, it carries to the SE but it also deducts from the total income which it isn't supposed to do as I understand it. I checked Pub 535 but it is, and will continue to be until sometime in March, the 2009 version which, of course, says you may not use those premiums. It isn't going to make a lot of difference in my personal taxes and, as I have said before, I don't think I have another client who would have this situation. BUT..it bugs the heck out of me when we are told one thing and then are left hanging to try to figure out how to take advantage of what we have been told. And I admit I am getting to be crotchety! On that happy note I will say thank you once again. MM

Margaret,

The deduction is supposed to lower AGI due to it being classified as self-employed health insurance.

Flowing to Sched SE lowers the SE tax in additon, where before, self-employed health insurance did NOT lower SE calculated on business profit. Your software is doing it correctly.

[Edward]

I asked a major "Tax & Accounting Chain" about the addition of Medicare B premiums and they've said to go ahead & use for this year. They have had discussions with IRS on this subject and they agreed that it could be placed on Line 29.

[grandmabee]

who H & R block?

[L.S.]

Ok, I'm still confused on this issue ---- do we show the amt of medicare premium on line 10c of line 1 of the sch a? then do we add that amt in on the Line 29(1040) worksheet on line 1???? Am I making this way too difficult???? Heaven help us ALL!

[grandmabee]

if you use on the front of the 1040 then not on the A. this works just like any other self employed health insurance premiums. no different

so if you input from the ss 1099 better not input the medicare amount or atx will automatic put in on the schedual a medical too.

[Cathy]

My recent issue of the Kiplinger Tax Letter stated that the instructions had been changed this year on the 1040 for the Health Insurance deduction for self-employeds...just haven't had time to look at it, but for 2010 IRS has decided for some reason we can deduction the Medicare B premiums as self-employed health insurance payments.

[Gail]

My recent issue of the Kiplinger Tax Letter stated that the instructions had been changed this year on the 1040 for the Health Insurance deduction for self-employeds...just haven't had time to look at it, but for 2010 IRS has decided for some reason we can deduction the Medicare B premiums as self-employed health insurance payments.

It is on page 29 of the 1040 instructions on IRS website.

[MargaretMort]

I read the instructions for the 1040 for Line 29. I love that they tell you to consult pub 535 which won't be upgraded until mid-March. My sincere thanks to everyone for all their assistance. In reading the responses it is good to know that I am not the only one who is confused. I plan to finish my return Friday--the carpets are being cleaned tomorrow--and e-file it and get to work on the other returns that are arriving.

Again, THANK YOU, THANK YOU, THANK YOU. MM

[Edward]

No it was not H&R Block - it was NATP. Just forget about all the confusion - put it on line 29 of the 1040 & include spouses amount also.

[clay]

I have a spouse with a sch C who pays HI just for herslf.

The other spouse is on SS and pays Medicare insurance for himself. He has no Sch C or other income.

Can I deduct the husband's Medicare?

Instructions say the owner of the business must pay the HI, so it seems the amount the SCH C spouse paid is OK, but the husband's Mdcre premium is not deductible.

[Margaret CPA in OH]

The spouse's Medicare premium would go on Schedule A, medical deductions subject to 7.5% of AGI.

[grandmabee]

I have a spouse with a sch C who pays HI just for herslf.

The other spouse is on SS and pays Medicare insurance for himself. He has no Sch C or other income.

Can I deduct the husband's Medicare?

Instructions say the owner of the business must pay the HI, so it seems the amount the SCH C spouse paid is OK, but the husband's Mdcre premium is not deductible.

I think we can use the spouse medicare premium as paid for the se deduction. insurance can cover worker and family.

[Margaret CPA in OH]

That seems odd to me as Medicare is not a family plan but an individual insurance plan. I would think that the insurance deduction for a self-employed individual would be the plan that covers the individual and, IF a family plan that covers the family, family. I may be crotchety but it seems there should be a limit on what all the rest of us taxpayers should subsidize for others. If the instructions say that the amount must be paid by the owner of the business, how can it possibly be true about a spouse's Medicare premium which is deducted from that person's Social Security and clearly NOT paid by the self-employed owner of the business.

I try to be aggressive with clients, too, but there have to be some limits and I would not do this. I don't believe it can be justified.

[Tax Prep by Deb]

That seems odd to me as Medicare is not a family plan but an individual insurance plan. I would think that the insurance deduction for a self-employed individual would be the plan that covers the individual and, IF a family plan that covers the family, family. I may be crotchety but it seems there should be a limit on what all the rest of us taxpayers should subsidize for others. If the instructions say that the amount must be paid by the owner of the business, how can it possibly be true about a spouse's Medicare premium which is deducted from that person's Social Security and clearly NOT paid by the self-employed owner of the business.

I try to be aggressive with clients, too, but there have to be some limits and I would not do this. I don't believe it can be justified.

I was reading this post while you were typing your reply. It echo's my thoughts exactly!

Deb!

[grandmabee]

I was reading this post while you were typing your reply. It echo's my thoughts exactly!

Deb!

it's a joint return. does it matter what bank account the payment comes out of? Why does his medicare premium count then. Business didn't pay it. It came out of a personal bank account. I not saying I agree with the theory behind some of these deductions but I don't make the laws or If I did EIC would be gone!

[GERALD]

I agree that only the self employed spouse's part B premiums should be deducted as SE health ins. HOWEVER, I think medicare supplement policies are a different story. You cannot buy family plan supplemental policies. Every policy has to be individual. If both premiums are paid from the business account, I have no problem treating them as SE health insurance.